Demand For Bandwidth Driving Commercial Satcom Growth

One of the few markets to have proved itself largely recession-proof, commercial satcom continues to grow with increased demand for high-definition video and broadband Internet services.

Satellites play a vital role in the increasingly networked world, and satellite operators are discovering a wealth of new opportunities. At the same time, commercial satellites will continue to play a role in more traditional communications services and government operations. Commercial satellite types include large spacecraft—for example, those for Eutelsat, Inmarsat and Intelsat operators—stationed in geosynchronous orbits, as well as smaller types (such as Globalstar and Iridium) that operate in low Earth orbits.

Both digital television and high-definition video broadcasting are driving satellite service growth. Demand for bandwidth-intensive HD video has increased the need for satellite capacity, forcing operators to expand their in-orbit fleets to provide services worldwide, particularly in Eastern Europe, North Africa and the Middle East.

Broadband Internet has become an indispensable technology for the modern world, though many still lack access to it, even in the U.S., particularly in rural areas where there are not enough potential customers to justify the cost of establishing extensive terrestrial broadband Internet links. It is here that satellites can provide vital services. The introduction of Ka-band satellites is lowering the cost of delivering high-speed Internet access to households and businesses throughout the world, with the ability to transmit with much higher power than other bands.

Governments have also been driving commercial satellite demand. Under pressure to reduce spending, some are purchasing capacity on in-orbit satellites or leasing the entire spacecraft from commercial operators to save money.

Another important service option expected to gain in popularity in coming years is hosted payloads, an approach that offers several advantages to governments, which design and build a payload, and commercial satellite operators, that build, launch and operate the satellite bus that hosts it.

Governments can deploy satellite payloads where and when they are needed at lower cost, while operators receive cash from governments to help cover the expense of building and launching satellites.

Despite the benefits of hosting payloads, some hurdles remain. One of the advantages for governments is the speed with which commercial satellite programs can be completed and launched; however, this can also be an obstacle. Governments tend to take much longer than the private sector to develop satellites and satellite payloads, while private corporations need to meet the time-sensitive market demands of a wide range of customers. Still, an increasing number of projects are underway worldwide. Intelsat, for example, has an agreement with Australia to carry a hosted payload onboard a new satellite.

Leading satellite producers include EADS-Astrium in Europe and Palo Alto, Calif.-based Space Systems/Loral, a division of Loral Space & Communications Ltd. Astrium is one of the top manufacturers of satellites with its Eurostar 3000 bus. Space Systems/Loral's success is linked to its 1300 satellite bus, which is well-suited for high-power satellite applications such as direct-to-home (DTH) service. Other major manufacturers in the U.S. include Boeing, Lockheed Martin and Orbital Sciences Corp. While Boeing and Lockheed Martin have dominated government and military sales in the past, reduced opportunities for new government business has forced the two behemoths back into the commercial realm. Orbital Sciences has been successful with its STAR-2 communications bus and low-Earth-orbiting, remote-sensing satellites.

In Europe, Thales Alenia Space continues to sell its Spacebus 4000 platform. Thales has had some success selling satellites without U.S.-made components, enabling them to be launched on Chinese Long March rockets. The China Aerospace Science & Technology Corp. is also a significant player in the satellite market, selling its Dong Fang Hong 4 (DFH-4) bus.

Satellite manufacturers do face some potential challenges. Several satellite operators are nearing the end of major fleet modernization programs, which will reduce the demand for new satellites in the future. In addition, some companies are toying with in-flight refueling. While this technology is still many years away, the potential for old satellites to be refueled in orbit could limit sales of new satellites.

With William N. Ostrove/Forecast International/www.forecastinternational.com